Almunia summarises recent state aid activity, including the restructuring of the German Landesbanken, and looks at future activity with Spanish banks and Dexia BIL.
Since the beginning of the crisis, the Commission – and more precisely the portfolio I am responsible for – has been controlling state aid granted to banks. I am happy to announce decisions today in four cases of bank restructuring – NordLB, BayernLB, UNNIM and Dexia BIL.
Our decision on the restructuring of BayernLB brings to an end the lengthy process of discussion with the public authorities involved over the restructuring of the German Landesbanken. Several of these banks took wrong investment decisions in the past, in particular in subprime mortgages, and were hit heavily by the financial crisis, calling their public shareholders for rescue. While WestLB is being wound down, others had to undergo a restructuring process, starting with LBBW in 2009, HSH in September 2011, and now BayernLB. This process will reduce the highly leveraged balance sheets of these banks by about half compared to pre-crisis levels. In future, the banks will re-focus their business model on lending to the real economy and on their regional core markets.
Turning now to Spain, we have also decided today on the restructuring of UNNIM. This bank was last March acquired by BBVA, one of Spain's most solid and reputable banks. This acquisition addresses the viability issues faced by the Catalonian Cajas that had merged into UNNIM.
We will of course have more work with the Spanish banks. The ones that need to receive state aid in the framework of the financial assistance will prepare their restructuring plans in the coming months. This process will enable the rebuilding of the Spanish financial sector on more solid grounds; this is one of the key pre-conditions for growth and job-creation in Spain.
I am also particularly happy to announce today our decision on the Luxembourg side of the highly complex Dexia case. We have concluded that the sales process of Dexia BIL did not involve any state aid.
A lot of work remains for the orderly resolution of the rest of the Dexia group. We have clearly expressed our doubts on the plan initially submitted by France, Belgium and Luxembourg. Discussions with the Member States have now resumed. We must ensure that the resolution process is fully in line with State aid rules.
Press release
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